Last Week, This Morning

November 3, 2025

Below you will find several key developments in the financial services industry, including related developments in information privacy and data security, from the past week. We add an "Amicus Brief(ly)¹" comment to each item, where we briefly (see what we did there?) note for friends (and again?) of CounselorLibrary the important takeaways from the developments outlined in the email. Our legal reporters - CARLAW, HouseLaw, InstallmentLaw, PrivacyLaw, and BizFinLaw - provide more comprehensive, real-time updates of federal and state laws, regulations, litigation, and other industry items of interest. For a personal guided tour and free trial of any of these legal reporters, please contact Michael Willer at 614-855-0505 or mwiller@counselorlibrary.com.

On October 28, the Consumer Financial Protection Bureau issued an interpretive rule to clarify that the Fair Credit Reporting Act "generally preempts state laws that touch on broad areas of credit reporting, consistent with Congress's intent to create national standards for the credit reporting system." The interpretive rule replaces a July 2022 interpretive rule that the CFPB withdrew in May 2025.

The July 2022 interpretive rule - titled "The Fair Credit Reporting Act's Limited Preemption of State Laws" - examined the FCRA's preemption provisions, Section 1681t(b)(1) and Section 1681t(b)(5). Section 1681t(b)(1), the Act's main preemption provision, provides that the FCRA preempts any state law requirements or prohibitions related to subject matters already regulated under 11 specifically enumerated sections or subsections of the FCRA. The July 2022 interpretive rule narrowed the scope of Section 1681t(b)(1), concluding that unless a state law specifically concerns a requirement or obligation addressed in the enumerated FCRA provisions, it is not preempted. The CFPB also concluded in the July 2022 interpretive rule that Section 1681t(b)(5) has a narrow scope.

The CFPB's current interpretive rule confirms the withdrawal of the July 2022 interpretive rule, stating that "[i]t was unnecessary for the Bureau in 2022 to opine on the scope of preemption under the FCRA. The FCRA does not compel - or even authorize - the Bureau to provide its legally binding views on preemption. That stands in contrast to other statutes administered by the Bureau, which do delegate such authority to the Bureau. Nor did the 2022 rule ease compliance burdens. To the contrary ..., the 2022 rule sowed confusion into the credit reporting system by creating a patchwork quilt of federal and state laws competing to govern the marketplace. Therefore, having completed its review, the Bureau has determined that the 2022 rule does not meet its current standards for the issuance of guidance. Additionally, consistent with its May 2025 guidance withdrawal notice, the Bureau does not believe that reliance interests compel the retention or reissuance of the 2022 rule. Parties understand that guidance, including the 2022 rule, is non-binding. Parties interested in the application of FCRA preemption to particular State laws can litigate such questions in court. The 2022 rule was not binding on the public or courts, and the withdrawal of the 2022 rule will have no effect on the legal status of any State law."

Amicus Brief(ly): As readers know, the CFPB has revised its enforcement and regulatory priorities this year under the new administration. This FCRA interpretive rule acknowledges its limited impact, consistent with how the new-look CFPB has approached what it considers overreach under previous leadership. The rescinded interpretive rule effectively told the states that the CFPB was not looking to expand the statutory scope of preemption and that states could work as hard as they liked to write laws limiting what information data furnishers could provide to consumer reporting agencies, including and especially as it related to the furnishing of medical debt information. In this iteration of its guidance, the CFPB lets us know that it wants industry and consumers to work out the scope of preemption in the courts. We can look to the statute, though, for an explicit statement about which parts of the FCRA Congress wanted to preempt inconsistent state laws and which parts Congress did not. The interpretive guidance is not binding, and the statute says what it says, so this update is not terribly impactful.

On October 29, the Consumer Financial Protection Bureau rescinded its rule titled "Registry of Nonbank Covered Persons Subject to Certain Agency and Court Orders," which was finalized in June 2024 and required covered nonbank entities that offer or provide consumer financial products or services to register certain final, public orders, including consent and stipulated orders, issued against them by government agencies or courts.

In May 2025, the CFPB proposed rescission of the final rule, citing concerns about compliance costs the rule imposes on regulated entities, which may be passed on to consumers. The CFPB also believed that the rule was not necessary as a tool to effectively monitor and reduce potential risks to consumers where Congress has authorized multiple other federal and state agencies to enforce federal consumer financial laws.

Amicus Brief(ly): In the recent flurry of activity out of the otherwise quiet CFPB, we saw this rule rescission coming. It was hard to find any industry participant that was excited to submit all of its negotiated consent orders for publication, adding scrutiny to regulatory compliance matters it allegedly got wrong. If left in place, the CFPB's rule was certain to result in companies choosing to litigate investigation findings and try to prevail in court, rather than settle them and move on, so they could potentially avoid this "bad actors" list. The CFPB's past arguments supporting the registry were unconvincing, so this is a good outcome.

On October 29, the Consumer Financial Protection Bureau withdrew its proposed rule titled "Registry of Supervised Nonbanks That Use Form Contracts to Impose Terms and Conditions That Seek to Waive or Limit Consumer Legal Protections," published in February 2023.

The proposed rule would have required most nonbanks subject to the CFPB's supervisory authority to register, in a CFPB system, information about their use of certain terms and conditions in form contracts and would have required the CFPB to publish such information and registrants' identifying information. The Bureau is withdrawing the proposed rule "based on its conclusion that the significant costs of the proposed registration and publication system are not justified by their uncertain and speculative benefits. ... [T]he proposal would have imposed a significant burden on supervised nonbanks in order to collect and publish information of uncertain or speculative value or benefit, mostly about regulated entities' use of lawful terms and conditions. It also would have imposed significant burdens on the Bureau, beyond those the Bureau estimated when it issued the Proposed Rule, which are unwarranted in light of the speculative benefits and additional limitations on the Bureau's resources ...."

Amicus Brief(ly): Hearts are not breaking over the withdrawal of this proposed rule either. We agreed when the rulemaking was happening that the potential benefits (to anyone) were speculative and uncertain. If industry is going to endure a burdensome requirement, we like to know that there is a good justification for the time and expense of complying with the requirement. Because that was really not present in this rulemaking, industry will quietly appreciate this action by the CFPB.

The California Department of Motor Vehicles recently adopted a final rule to establish how the value of a vehicle subject to a lien sale should be calculated. The final rule will benefit lienholders when determining which procedure must be followed when selling a vehicle through the lien sale process. Currently, the California Civil Code outlines the procedures for a lien sale based on the value of a vehicle but is silent, except in cases of a public agency-ordered towing, as to how the value should be determined.

The new rule sets forth the process that lienholders must go through under Section 3071 of the Civil Code (for vehicles valued at or over $4,000 for lien sale purposes) and Section 3072 of the Civil Code (for vehicles valued under $4,000 for lien sale purposes) in order to obtain authorization to conduct a lien sale, including submitting an application to the DMV that includes, among other things, a description of the vehicle subject to the lien, the names and addresses of the registered and legal owners of the vehicle or any person whom the lienholder knows claims an interest in the vehicle, and a fee.

The new rule provides that the DMV may assign a vehicle value for purposes of Sections 3071 and 3072 by using the market value as defined in Section 157.02(c) of Title 13, Division 1, Chapter 1, Article 3 (Vehicle Registration and Titling) of the California Code of Regulations, which is used to determine the current vehicle license registration fee. The new rule provides that this vehicle valuation does not apply under certain circumstances.

The rule is effective on January 1, 2026.

Amicus Brief(ly): It is helpful for consensual lienholders (e.g., dealers, finance companies, and banks) to know how the state will value a vehicle, for lien sale purposes, that is subject to a mechanic's or other non-consensual lien that can prime a consensual lien. That information can drive outcomes for the consensual lienholder, including the potential release of that lien in favor of pursuit of money collection when it looks like the non-consensual lien will absorb most or all of the value of the vehicle. The code provisions referenced in the rule are existing, not new, statutes, but California pointing us to the existing procedures in this context will help consumer finance providers develop recovery strategies when their collateral is in jeopardy.

On October 27, Democrats on the Senate Banking, Housing, and Urban Affairs Committee sent a letter to Russell Vought, the acting director of the Consumer Financial Protection Bureau, raising concerns about a statement he made in a recent interview that he plans to "close down" the CFPB "within the next two or three months." The senators contend in the letter that shutting down the agency is illegal.

The senators ask Vought to respond to the following questions no later than October 31, 2025:

• What is the current unobligated balance of the CFPB fund? Without additional funding, on what date will the Bureau run out of funding at its current spending rate?
• What is the current unobligated balance of the CFPB's civil penalty fund?
• Despite a federal court order barring you from shutting down the CFPB, you confirmed that you still plan to try to close the agency in two or three months. Has the agency prepared specific plans for reductions in force, for terminating contracts, for reducing enforcement action, or for winding down other work in that timeframe?

Amicus Brief(ly): As of this morning, we are not aware of any response from acting director Vought to the senators' request for information. As noted in our other updates, the CFPB is working at its own pace and focusing on its updated enforcement and regulatory priorities. But Vought has been clear about the administration's expectation to finish its work shutting down the CFPB. The senators raise a fair point about the ability of the administration to dismantle a federal agency created by a federal statute, with one court already weighing in and ordering that it cannot be done (that way). We do not anticipate that the CFPB will respond imminently to the letter, but we will be watching for and reporting on updates from the CFPB as to its plans, as well as the congressional reaction to those plans and any subsequent litigation. Stay tuned.

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¹ For the unfamiliar, an “Amicus Brief” is a legal brief submitted by an amicus curiae (friend of the court) in a case where the person or organization (the “friend”) submitting the brief is not a party to the case, but is allowed by the court to file the brief to share information or expertise that bears on the issues in the case.